Peru Announces Package To Attract More Investment Amid Recession

Peru, currently grappling with a recession, has announced a package comprising more than two dozen new measures aimed at helping the country's economy by boosting investments.

Alex Contreras, the Minister of Economy and Finance of Peru, said Thursday that the country has introduced measures to attract more investment, especially through the mining sector, Reuters reported.

Peru is the world's second-largest producer of copper. However, the country is currently experiencing a decline in private investment due to the El Nino weather phenomenon.

The economy minister is optimistic about the recovery plan for the country, noting that Peru will witness a surge in funding by $8 billion next year from private and public projects.

"We are betting on a major recovery" in the fourth quarter, Contreras said during a press conference. The minister also expects that the country's inflation rate will fall from 3.9% to 3.8% this month (November), adding that Peru will hold its fiscal deficit goal of 2.4% of GDP this year.

He continued, "We're looking to create a jolt of confidence, for the private sector to understand that the government is committed to reactivating the economy. We don't want the country to fall into pessimism."

Due to the prevailing circumstances in Peru, the crime rate in the capital city of Lima has witnessed a significant surge. The reported cases of crime escalated from 120,350 in 2021 to 160,200 in 2022, highlighting a worrying trend. In one recent incident, at least 15 people were injured after someone threw a war grenade into a nightclub.

In September, Peruvian President Dina Boluarte declared a state of emergency in three districts — San Juan de Lurigancho, San Martín de Porres, and Piura locality of Sullana — to fight against crime in the country.

The illegal drug trade is one of the factors driving up the crime rate in the country. Boluarte said last month that she would be discussing drug trafficking with her U.S. counterpart, Joe Biden, during a regional summit, held earlier this month.

Aside from crime, there are various other reasons behind Peru's economic crisis. For instance, political instability is impacting investor decision-making in the country.

Furthermore, the COVID-19 pandemic also negatively impacted the country. In fact, Peru had to take a $300 Million loan from the Inter-American Development Bank (IDB) to improve its economic condition.